| Most common pay frequencies | Biweekly (26 checks/yr), semimonthly (24), weekly (52) (U.S. Bureau of Labor Statistics payroll data) |
| Social Security tax rate (employee share) | 6.2% up to the annual wage base (IRS Publication 15) |
| Medicare tax rate (employee share) | 1.45% on all wages (IRS Publication 15) |
| States with no income tax | 9 states (including TX, FL, WA, and others) (Tax Foundation) |
| W-4 updates allowed | Any time during the year (IRS guidance) |
Why Your Pay Stub Is Worth a Close Look
Most people glance at the bottom number — net pay — and move on. But every line above it tells you something meaningful about where your money goes and whether your employer is withholding the right amounts. Catching a payroll error early, understanding your tax situation, or simply knowing what FICA means can save you headaches later.
Pay stubs can look different depending on your employer's payroll system, but the core sections are consistent. Here's what each one actually means.
| Most common pay frequencies | Biweekly (26 checks/yr), semimonthly (24), weekly (52) (U.S. Bureau of Labor Statistics payroll data) |
| Social Security tax rate (employee share) | 6.2% up to the annual wage base (IRS Publication 15) |
| Medicare tax rate (employee share) | 1.45% on all wages (IRS Publication 15) |
| States with no income tax | 9 states (including TX, FL, WA, and others) (Tax Foundation) |
| W-4 updates allowed | Any time during the year (IRS guidance) |
Gross Pay, Net Pay, and the Difference Between Them
Gross pay is your total earnings before anything is taken out. If you're salaried at $60,000 per year and paid biweekly, your gross pay per stub is $2,307.69. If you're hourly, gross pay reflects your hours worked multiplied by your rate, plus any overtime.
Net pay — often labeled "take-home pay" — is what lands in your bank account after all deductions. The gap between these two numbers is what the rest of your pay stub explains.
Gross Pay
Your total earnings before any taxes or deductions are applied. This is the starting number from which everything else is subtracted.
Net Pay
The amount you actually receive after all taxes and deductions have been withheld. Also called take-home pay.
FICA
Federal Insurance Contributions Act taxes, which fund Social Security and Medicare. Both you and your employer contribute a set percentage of your wages.
Pre-Tax Deduction
A deduction subtracted from gross pay before income taxes are calculated, reducing your taxable income. Traditional 401(k) contributions and health insurance premiums are common examples.
W-4
The IRS form you complete for your employer that tells them how much federal income tax to withhold from each paycheck.
Year-to-Date (YTD)
A running total of earnings or deductions from the start of the calendar year through the current pay period. Useful for tax preparation and checking payroll accuracy.
Year-to-date (YTD) columns appear beside most line items. These running totals let you verify that your annual earnings and withholdings are on track. They're also useful when preparing your tax return.
Federal and State Tax Withholding
Federal income tax is withheld based on the information you submitted on your IRS Form W-4. The amount depends on your filing status, the number of dependents you claimed, and any additional withholding you requested. It is not a flat percentage — it follows the IRS tax brackets and withholding tables.
State income tax works similarly but is governed by your state's rules. Nine states currently have no state income tax; residents of those states won't see this line. Some localities also charge a local or city income tax, which appears as a separate line.
Withholding Too Little Can Mean a Tax Bill
If your W-4 underestimates your tax liability — for instance, because you have multiple jobs or significant non-wage income — you could owe taxes plus potential underpayment penalties when you file. Review your withholding annually using the IRS Tax Withholding Estimator, and consult a tax professional if your situation is complex.
If your withholding seems too high or too low — or your circumstances changed (marriage, a new dependent, a second job) — you can submit a new W-4 to your employer at any time. Consulting a tax professional before making changes is a good idea.
FICA: Social Security and Medicare
FICA stands for the Federal Insurance Contributions Act. It covers two mandatory payroll taxes:
- Social Security tax: 6.2% of your gross wages, up to the annual wage base limit set by the IRS each year. Your employer matches this 6.2%.
- Medicare tax: 1.45% of all gross wages, no cap. Employers also match this. Higher earners may see an additional 0.9% Medicare surtax once wages exceed IRS thresholds.
These aren't income taxes — they fund specific federal programs. You'll see the totals on your W-2 at year-end, and they factor into your eventual Social Security and Medicare benefits.
7.65%
Total FICA rate paid by employees
Combines the 6.2% Social Security and 1.45% Medicare tax rates per IRS Publication 15.
15.3%
FICA rate for self-employed workers
Self-employed individuals pay both the employee and employer share of FICA, per IRS Schedule SE rules.
Pre-Tax and Post-Tax Deductions
Below taxes, you'll typically see benefit deductions. The distinction between pre-tax and post-tax matters because it affects your taxable income.
Pre-tax deductions are subtracted from gross pay before taxes are calculated, reducing the income you're taxed on. Common examples include:
- Health, dental, and vision insurance premiums (employer-sponsored plans)
- Contributions to a traditional 401(k) or 403(b)
- Flexible Spending Account (FSA) or Health Savings Account (HSA) contributions
Post-tax deductions come out after taxes are applied. Roth 401(k) contributions, some supplemental insurance premiums, and wage garnishments fall into this category.
If you want to decode a contractor document with the same methodical approach, see how reading a contractor's quote line by line follows the same logic of separating costs into categories.
This article provides general financial education and is not personalized tax or financial advice. For questions about your specific withholding or deductions, consult a qualified tax professional or your employer's HR department.